Shares of Ardent Leisure Group (ASX: AAD) soared as much as 6% higher today following the announcement of its latest annual profit result this morning.
In the year to 30 June 2015, the owner of Goodlife Health Clubs, AMF and Kingpin bowling, Dreamworld and much more, reported a 19% jump in revenues, but a sharp 34% drop in profit.
The group's rapidly-growing Main Event Family Entertainment business in the US was a standout performer. It produced a 60% increase in US dollar revenue and a 64% increase in EBITDA (earnings before interest, tax, depreciation and amortisation). The business is now Ardent's second largest revenue generator behind Health Clubs.
Unfortunately, the Health Clubs business didn't perform as strongly. Although revenues climbed 8.7%, thanks to the acquisition of new stores in Western Australia, profit fell 22.4%. The group is quickly converting its stores to 24/7 operations, which will help it retain customers and attract new people to the gyms.
The company's three other businesses, including Bowling, which houses AMF and Kingpin; Theme Parks, including Dreamworld, WhiteWater World and SkyPoint; and the Marinas portfolio, each performed broadly in-line with last year.
Pleasingly, despite the sharp drop in profit, the board declared a final distribution of 5.5 cents per security, payable on 31 August 2015.
Outlook
Following the recent appointment of Deborah Thomas as CEO, the group now has the goal of reviving its key local business, by increasing customer satisfaction and the value proposition, and nurturing growth businesses like Main Event.
While Ardent shareholders will be very glad to see the back of what proved to be a tough financial year, with a growing US business and a strategy to resurrect the growth prospects of its Health Clubs, there's reasons to be optimistic about the future of the company.
